Purchasing Rental Property

[recordsclerk]

Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years.
My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.

[bearishgurl]

[quote=wanttobuy]This is an interesting point. A friend of mine is using this approach, catering to long term quality tenants and he is doing well, but again he has probably put down a sizable amount in order to achieve positive cash flow. As we all know SFR in a good school district and desirable family oriented neighborhood is NOT cheap. So one more thing to add to the equation is to look into your pocket. How deep it is? . . .[/quote]

wanttobuy, a “good school district” and “desireable family oriented neighborhood” is in the eye of the tenant-beholder. What some Piggs here consider “good” or “acceptable” is not what EVERY tenant considers rent-worthy. Many tenants with families are living within a short walk of other relatives, for child-care and after-school care purposes. They are sending their children to schools which were “good enough” for them to attend. They are living in areas where they feel “at home” and “comfortable” and where they are paying a stable $1400 – $1800 mo for rent for an SFR big enough for their entire families with yards big enough for their pets. There is no need to move if their family should grow by one. This is the essence of the desires of a long-term tenant.

Yes, unless financing with FHA (w/high prepaid and monthly MMI), you will most likely have to have 30% down for a non-owner occupied property, located anywhere.

As a landlord, you must, above all, be realistic and KNOW your target tenant market, inside and out.

There are PLENTY of SFR’s on the market in SD county with asking prices of $175K to $250K which would make great long-term rental investments, IMO.

[bearishgurl]

[quote=wanttobuy]This is an interesting point. A friend of mine is using this approach, catering to long term quality tenants and he is doing well, but again he has probably put down a sizable amount in order to achieve positive cash flow. As we all know SFR in a good school district and desirable family oriented neighborhood is NOT cheap. So one more thing to add to the equation is to look into your pocket. How deep it is? . . .[/quote]

wanttobuy, a “good school district” and “desireable family oriented neighborhood” is in the eye of the tenant-beholder. What some Piggs here consider “good” or “acceptable” is not what EVERY tenant considers rent-worthy. Many tenants with families are living within a short walk of other relatives, for child-care and after-school care purposes. They are sending their children to schools which were “good enough” for them to attend. They are living in areas where they feel “at home” and “comfortable” and where they are paying a stable $1400 – $1800 mo for rent for an SFR big enough for their entire families with yards big enough for their pets. There is no need to move if their family should grow by one. This is the essence of the desires of a long-term tenant.

Yes, unless financing with FHA (w/high prepaid and monthly MMI), you will most likely have to have 30% down for a non-owner occupied property, located anywhere.

As a landlord, you must, above all, be realistic and KNOW your target tenant market, inside and out.

There are PLENTY of SFR’s on the market in SD county with asking prices of $175K to $250K which would make great long-term rental investments, IMO.

[bearishgurl]

[quote=wanttobuy]This is an interesting point. A friend of mine is using this approach, catering to long term quality tenants and he is doing well, but again he has probably put down a sizable amount in order to achieve positive cash flow. As we all know SFR in a good school district and desirable family oriented neighborhood is NOT cheap. So one more thing to add to the equation is to look into your pocket. How deep it is? . . .[/quote]

wanttobuy, a “good school district” and “desireable family oriented neighborhood” is in the eye of the tenant-beholder. What some Piggs here consider “good” or “acceptable” is not what EVERY tenant considers rent-worthy. Many tenants with families are living within a short walk of other relatives, for child-care and after-school care purposes. They are sending their children to schools which were “good enough” for them to attend. They are living in areas where they feel “at home” and “comfortable” and where they are paying a stable $1400 – $1800 mo for rent for an SFR big enough for their entire families with yards big enough for their pets. There is no need to move if their family should grow by one. This is the essence of the desires of a long-term tenant.

Yes, unless financing with FHA (w/high prepaid and monthly MMI), you will most likely have to have 30% down for a non-owner occupied property, located anywhere.

As a landlord, you must, above all, be realistic and KNOW your target tenant market, inside and out.

There are PLENTY of SFR’s on the market in SD county with asking prices of $175K to $250K which would make great long-term rental investments, IMO.

[bearishgurl]

[quote=wanttobuy]This is an interesting point. A friend of mine is using this approach, catering to long term quality tenants and he is doing well, but again he has probably put down a sizable amount in order to achieve positive cash flow. As we all know SFR in a good school district and desirable family oriented neighborhood is NOT cheap. So one more thing to add to the equation is to look into your pocket. How deep it is? . . .[/quote]

wanttobuy, a “good school district” and “desireable family oriented neighborhood” is in the eye of the tenant-beholder. What some Piggs here consider “good” or “acceptable” is not what EVERY tenant considers rent-worthy. Many tenants with families are living within a short walk of other relatives, for child-care and after-school care purposes. They are sending their children to schools which were “good enough” for them to attend. They are living in areas where they feel “at home” and “comfortable” and where they are paying a stable $1400 – $1800 mo for rent for an SFR big enough for their entire families with yards big enough for their pets. There is no need to move if their family should grow by one. This is the essence of the desires of a long-term tenant.

Yes, unless financing with FHA (w/high prepaid and monthly MMI), you will most likely have to have 30% down for a non-owner occupied property, located anywhere.

As a landlord, you must, above all, be realistic and KNOW your target tenant market, inside and out.

There are PLENTY of SFR’s on the market in SD county with asking prices of $175K to $250K which would make great long-term rental investments, IMO.

[bearishgurl]

[quote=wanttobuy]This is an interesting point. A friend of mine is using this approach, catering to long term quality tenants and he is doing well, but again he has probably put down a sizable amount in order to achieve positive cash flow. As we all know SFR in a good school district and desirable family oriented neighborhood is NOT cheap. So one more thing to add to the equation is to look into your pocket. How deep it is? . . .[/quote]

wanttobuy, a “good school district” and “desireable family oriented neighborhood” is in the eye of the tenant-beholder. What some Piggs here consider “good” or “acceptable” is not what EVERY tenant considers rent-worthy. Many tenants with families are living within a short walk of other relatives, for child-care and after-school care purposes. They are sending their children to schools which were “good enough” for them to attend. They are living in areas where they feel “at home” and “comfortable” and where they are paying a stable $1400 – $1800 mo for rent for an SFR big enough for their entire families with yards big enough for their pets. There is no need to move if their family should grow by one. This is the essence of the desires of a long-term tenant.

Yes, unless financing with FHA (w/high prepaid and monthly MMI), you will most likely have to have 30% down for a non-owner occupied property, located anywhere.

As a landlord, you must, above all, be realistic and KNOW your target tenant market, inside and out.

There are PLENTY of SFR’s on the market in SD county with asking prices of $175K to $250K which would make great long-term rental investments, IMO.

[bearishgurl]

[quote=recordsclerk]Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years. My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.[/quote]

Thank your for your knowledgable post, recordsclerk. I maintain that tenants tend to stay far longer in a reasonably-priced SFR, especially one which they can do some work for a discount (such as mowing/trimming) than they do in a condo/apt. A rental SFR caters to a different type of tenant, often one that has family ties in the immediate area.

[bearishgurl]

[quote=recordsclerk]Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years. My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.[/quote]

Thank your for your knowledgable post, recordsclerk. I maintain that tenants tend to stay far longer in a reasonably-priced SFR, especially one which they can do some work for a discount (such as mowing/trimming) than they do in a condo/apt. A rental SFR caters to a different type of tenant, often one that has family ties in the immediate area.

[bearishgurl]

[quote=recordsclerk]Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years. My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.[/quote]

Thank your for your knowledgable post, recordsclerk. I maintain that tenants tend to stay far longer in a reasonably-priced SFR, especially one which they can do some work for a discount (such as mowing/trimming) than they do in a condo/apt. A rental SFR caters to a different type of tenant, often one that has family ties in the immediate area.

[bearishgurl]

[quote=recordsclerk]Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years. My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.[/quote]

Thank your for your knowledgable post, recordsclerk. I maintain that tenants tend to stay far longer in a reasonably-priced SFR, especially one which they can do some work for a discount (such as mowing/trimming) than they do in a condo/apt. A rental SFR caters to a different type of tenant, often one that has family ties in the immediate area.

[bearishgurl]

[quote=recordsclerk]Regarding my partner’s 3bd/2bt unit in 92120, he has had a lot of turnover recently. 3 tennants in the last 3 years. He is currently listing the unit. It usually takes about a couple of days to weeks to get a qualified tennant. It depends also if it needs work. I would say anyone that can put a 100% into getting the unit cleaned up and listed should have no problem getting a tennant within a couple of weeks. He also has a single family 3bd/2ba home in Serra Mesa 92123 that rents for 1650 has the same tennants for last 4-5 years. My aunts condo has had better luck. Same tennants for the last 2 years and prior to that the tennant stayed for 3 years. The last tennants moved in the next week after vacancy.
My single family 4bd/2ba in city heights has the same tennants since I purchased it in 2004.
My parents have a home in Cerritos that has had the same tennants since 1985.[/quote]

Thank your for your knowledgable post, recordsclerk. I maintain that tenants tend to stay far longer in a reasonably-priced SFR, especially one which they can do some work for a discount (such as mowing/trimming) than they do in a condo/apt. A rental SFR caters to a different type of tenant, often one that has family ties in the immediate area.

[surveyor]

[quote=wanttobuy]As for out of state investment or out of SD investment, even if with the same amount of money, one can get a SFR instead of Cando, but if SD market is doing better overall, we could see the same level of return, right? Any thoughts?[/quote]

San Diego (and the major California cities) enjoy a very low vacancy rate among rentals, whether SFR or condos or multi-units. However, because of this, the price of units in San Diego is very high, usually around $150k or more per unit.

Other locations outside these markets tend to have a higher vacancy rate. However, their per unit cost is much lower than San Diego. Some areas can go for $50k per unit or even less. However, they are not high rental areas and so sometimes you will go several months with a vacancy.

For example, perhaps you will be able to get a San Diego SFR for around $250k or so. Maybe if you’re lucky you can get one for $180k. It will probably pencil out as an investment.

However, in other locations you can get a 4 unit for about $120k to about $200k. These 4 units are available in pretty major cities. Your vacancy rate in these properties would run to around 10%.

Other advantages of other markets? Well, if your San Diego rental goes vacant, you are out the complete mortgage payment (maybe $1000 a month). For the 4 unit, you will theoretically still have 1 to 3 tenants paying the bill. So maybe you’re not hurt as much.

My own situation, I’ve been lucky with the rentals in other markets except one. In the beginning, my South Carolina 4 unit had a vacancy for awhile, but only for the first year. After that it has been continually rented. I’ve had some tenants go but the property manager has been able to get it rented in less than a month. My Alabama 4 unit property has been more problematic, it’s had quite a few vacancies (once it had three vacancies). However, since it cost only $115k, the mortgage payment was not difficult to handle (about $700 without tax and insurance). The one market that has proven difficult to rent in is surprisingly Denver, which is a fairly major city, but it has been having deep economic problems for awhile now and there is intense competition for tenants in that market.

I’ve been sitting pat on my investments for awhile, mostly focusing on getting them to perform better. However, I no longer look at San Diego to invest in because a) that’s what everyone wants to do and b) I’d rather purchase a $100k 4 unit property than a $200k San Diego SFR.

Hope that helps.

[surveyor]

[quote=wanttobuy]As for out of state investment or out of SD investment, even if with the same amount of money, one can get a SFR instead of Cando, but if SD market is doing better overall, we could see the same level of return, right? Any thoughts?[/quote]

San Diego (and the major California cities) enjoy a very low vacancy rate among rentals, whether SFR or condos or multi-units. However, because of this, the price of units in San Diego is very high, usually around $150k or more per unit.

Other locations outside these markets tend to have a higher vacancy rate. However, their per unit cost is much lower than San Diego. Some areas can go for $50k per unit or even less. However, they are not high rental areas and so sometimes you will go several months with a vacancy.

For example, perhaps you will be able to get a San Diego SFR for around $250k or so. Maybe if you’re lucky you can get one for $180k. It will probably pencil out as an investment.

However, in other locations you can get a 4 unit for about $120k to about $200k. These 4 units are available in pretty major cities. Your vacancy rate in these properties would run to around 10%.

Other advantages of other markets? Well, if your San Diego rental goes vacant, you are out the complete mortgage payment (maybe $1000 a month). For the 4 unit, you will theoretically still have 1 to 3 tenants paying the bill. So maybe you’re not hurt as much.

My own situation, I’ve been lucky with the rentals in other markets except one. In the beginning, my South Carolina 4 unit had a vacancy for awhile, but only for the first year. After that it has been continually rented. I’ve had some tenants go but the property manager has been able to get it rented in less than a month. My Alabama 4 unit property has been more problematic, it’s had quite a few vacancies (once it had three vacancies). However, since it cost only $115k, the mortgage payment was not difficult to handle (about $700 without tax and insurance). The one market that has proven difficult to rent in is surprisingly Denver, which is a fairly major city, but it has been having deep economic problems for awhile now and there is intense competition for tenants in that market.

I’ve been sitting pat on my investments for awhile, mostly focusing on getting them to perform better. However, I no longer look at San Diego to invest in because a) that’s what everyone wants to do and b) I’d rather purchase a $100k 4 unit property than a $200k San Diego SFR.

Hope that helps.

[surveyor]

[quote=wanttobuy]As for out of state investment or out of SD investment, even if with the same amount of money, one can get a SFR instead of Cando, but if SD market is doing better overall, we could see the same level of return, right? Any thoughts?[/quote]

San Diego (and the major California cities) enjoy a very low vacancy rate among rentals, whether SFR or condos or multi-units. However, because of this, the price of units in San Diego is very high, usually around $150k or more per unit.

Other locations outside these markets tend to have a higher vacancy rate. However, their per unit cost is much lower than San Diego. Some areas can go for $50k per unit or even less. However, they are not high rental areas and so sometimes you will go several months with a vacancy.

For example, perhaps you will be able to get a San Diego SFR for around $250k or so. Maybe if you’re lucky you can get one for $180k. It will probably pencil out as an investment.

However, in other locations you can get a 4 unit for about $120k to about $200k. These 4 units are available in pretty major cities. Your vacancy rate in these properties would run to around 10%.

Other advantages of other markets? Well, if your San Diego rental goes vacant, you are out the complete mortgage payment (maybe $1000 a month). For the 4 unit, you will theoretically still have 1 to 3 tenants paying the bill. So maybe you’re not hurt as much.

My own situation, I’ve been lucky with the rentals in other markets except one. In the beginning, my South Carolina 4 unit had a vacancy for awhile, but only for the first year. After that it has been continually rented. I’ve had some tenants go but the property manager has been able to get it rented in less than a month. My Alabama 4 unit property has been more problematic, it’s had quite a few vacancies (once it had three vacancies). However, since it cost only $115k, the mortgage payment was not difficult to handle (about $700 without tax and insurance). The one market that has proven difficult to rent in is surprisingly Denver, which is a fairly major city, but it has been having deep economic problems for awhile now and there is intense competition for tenants in that market.

I’ve been sitting pat on my investments for awhile, mostly focusing on getting them to perform better. However, I no longer look at San Diego to invest in because a) that’s what everyone wants to do and b) I’d rather purchase a $100k 4 unit property than a $200k San Diego SFR.

Hope that helps.

[surveyor]

[quote=wanttobuy]As for out of state investment or out of SD investment, even if with the same amount of money, one can get a SFR instead of Cando, but if SD market is doing better overall, we could see the same level of return, right? Any thoughts?[/quote]

San Diego (and the major California cities) enjoy a very low vacancy rate among rentals, whether SFR or condos or multi-units. However, because of this, the price of units in San Diego is very high, usually around $150k or more per unit.

Other locations outside these markets tend to have a higher vacancy rate. However, their per unit cost is much lower than San Diego. Some areas can go for $50k per unit or even less. However, they are not high rental areas and so sometimes you will go several months with a vacancy.

For example, perhaps you will be able to get a San Diego SFR for around $250k or so. Maybe if you’re lucky you can get one for $180k. It will probably pencil out as an investment.

However, in other locations you can get a 4 unit for about $120k to about $200k. These 4 units are available in pretty major cities. Your vacancy rate in these properties would run to around 10%.

Other advantages of other markets? Well, if your San Diego rental goes vacant, you are out the complete mortgage payment (maybe $1000 a month). For the 4 unit, you will theoretically still have 1 to 3 tenants paying the bill. So maybe you’re not hurt as much.

My own situation, I’ve been lucky with the rentals in other markets except one. In the beginning, my South Carolina 4 unit had a vacancy for awhile, but only for the first year. After that it has been continually rented. I’ve had some tenants go but the property manager has been able to get it rented in less than a month. My Alabama 4 unit property has been more problematic, it’s had quite a few vacancies (once it had three vacancies). However, since it cost only $115k, the mortgage payment was not difficult to handle (about $700 without tax and insurance). The one market that has proven difficult to rent in is surprisingly Denver, which is a fairly major city, but it has been having deep economic problems for awhile now and there is intense competition for tenants in that market.

I’ve been sitting pat on my investments for awhile, mostly focusing on getting them to perform better. However, I no longer look at San Diego to invest in because a) that’s what everyone wants to do and b) I’d rather purchase a $100k 4 unit property than a $200k San Diego SFR.

Hope that helps.

[Author]

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